Holding

The Supreme Court held that the arbitral tribunal had jurisdiction over the husband under Bye‑law 248(a) and that the award was neither perverse nor patently illegal, thereby upholding the award and confirming joint and several liability.

Summary

The stock broker AC Chokshi Share Broker invoked arbitration under BSE Bye‑law 248(a) to recover a large debit balance that accrued in the wife’s trading account after the 2001 market crash, alleging that the husband had orally agreed to be jointly and severally liable. The arbitral tribunal held both spouses jointly liable and dismissed the husband’s counter‑claim. The husband challenged the award, first under Section 34 and then under Section 37 of the Arbitration and Conciliation Act, arguing lack of jurisdiction and that the award was perverse and patently illegal. The High Court set aside the award against the husband, but the Supreme Court held that the arbitral tribunal had proper jurisdiction under the broad wording of Bye‑law 248(a) and that the award was not perverse or illegal. Consequently, the Supreme Court upheld the award in its entirety, confirming joint and several liability of both spouses.

Issues considered

The arbitral tribunal’s jurisdiction to entertain an arbitration claim against the husband under BSE Bye‑law 248(a) based on an oral joint‑liability agreement.
Whether the High Court correctly exercised its powers under Section 37 of the Arbitration and Conciliation Act in setting aside the award on grounds of perversity and patent illegality.

Legislation cited

Arbitration and Conciliation Act, 1996s. 16, s. 34, s. 37, s. 4
Bombay Stock Exchange Bye‑laws, 1957s. 227(a), s. 247A, s. 248(a)
SEBI Guidelines

Headnote

Issue for Consideration If a wife owes a stock market debt, can the registered stock broker invoke arbitration against her husband under BSE Bye-Laws, 1957 and hold him jointly and severally liable for debt based on an oral agreement. Headnotes† Arbitration – the registered stock broker transferred former’s credit balance to wife’s account to offset her losses – 2001 market crash – Debit balance in wife’s account increased exponentially – Stock broker invoked arbitration under BSE bye-laws to recover the

Subjects

ArbitrationJoint and several liabilityStock marketStock brokerDebit balanceOral contractJudicial interventionSection 34Section 37Arbitration and Conciliation ActSEBIBSEPatent illegalityPerversityMarital relationshipWifeHusbandSpouseSection 16Public policy

Judgment

[2025] 2 S.C.R. 1545 : 2025 INSC 174

AC Chokshi Share Broker Private Limited
v.
Jatin Pratap Desai & Anr.
(Civil Appeal No. 2227 of 2025)
10 February 2025
[Pamidighantam Sri Narasimha* and Sandeep Mehta, JJ.]

Issue for Consideration
If a wife owes a stock market debt, can the registered stock broker
invoke arbitration against her husband under BSE Bye-Laws,
1957 and hold him jointly and severally liable for debt based on
an oral agreement.

Headnotes†
Arbitration – On husband’s oral instructions the registered
stock broker transferred former’s credit balance to wife’s
account to offset her losses – 2001 market crash – Debit
balance in wife’s account increased exponentially – Stock
broker invoked arbitration under BSE bye-laws to recover the
amount – Arbitral Award held wife and husband jointly and
severally liable – Upheld by Single Judge of High Court u/s.34
of A&C Act – Division Bench set aside Award re husband u/s.37
of A&C Act – Impugned before Supreme Court – Maintainability
of arbitration:
Issue 1: The arbitration against the husband was maintainable.
Held: While interpreting contracts, courts must shun hyper-
technical approach and adopt a practical approach taking into
consideration the conduct and intention of the Parties – In case
at hand, the joint and several liability of both the Respondents
was evident from their oral contract with the stock broker and also
from the transactions undertaken together by them – The fact of
them maintaining separate client registration agreements, having
separate client codes and accounts was immaterial – Even in
institutional arbitrations (as in case at hand) as opposed to those
based on parties’ consent, the following factors laid down in ONGC v.
Discovery Enterprise and affirmed in Cox and Kings, are relevant
in ascertaining whether a non-signatory can be made party to an

* Author
1546 [2025] 2 S.C.R.

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arbitration: (a) the mutual intention of the parties; (b) relationship
between signatory and non-signatory; (c) commonality of subject-
matter; and (d) composite nature of transaction. [Paras 14-15]
Bye-law 248(a) is broadly worded which allows for reference to
arbitration of any dispute “arising out of, in relation to, incidental
to or in pursuance of” transactions, contracts, and dealings and
hence the oral contract between the Appellant and Respondent
No.1 (husband) cannot be termed as a “private” transaction as held
by the High Court – Further, issues regarding jurisdiction of arbitral
tribunal or scope of Bye-law 248(a) could be raised only before the
Arbitral Tribunal as per s.16 of A&C Act and by failing to do so, the
objecting party is deemed to have waived his right, in terms of s.4
of the A&C Act, to raise such an issue at a later stage – Hence,
High court erred in entertaining such a plea u/s.37 of A&C Act which
was not raised before the Arbitrator. [Paras 20, 21]

Arbitration and Conciliation Act, 1996 – s.37 – Scope of s.37
of A&C Act is limited to determining whether s.34 court has
exercised its jurisdiction properly and rightly:
Held: High Court’s division bench erred not only by re-appreciating
the evidence – A domain reserved solely for the arbitrator but
also by applying ground of ‘perversity’ which is available at the
stage of s.34 – Award did not suffer from any patent illegality as
adjustment of accounts was done in accordance with the BSE
bye-Laws and SEBI Guidelines – Arbitral Award was upheld in
entirety. [Paras 22-31]

Case Law Cited
Bombay Stock Exchange v. Jaya I. Shah [2003] Supp. 4 SCR 892 :
(2004) 1 SCC 160; Stock Brokers Pvt Ltd v. B.H.H. Securities Pvt.
Ltd. [2011] 16 SCR 87 : (2012) 1 SCC 594; ONGC v. Discovery
Enterprise [2022] 4 SCR 926 : (2022) 8 SCC 42; Cox and Kings v.
SAP India Pvt. Ltd. [2023] 15 SCR 621 : (2024) 4 SCC 1 – relied on.
Syntrex Corporation v. Rajkumar Keshardev, 2007 SCC OnLine
Bom 620 – relied on.

List of Acts
Arbitration and Conciliation Act, 1996; Bombay Stock Exchange
Bye-Laws, 1957; SEBI Guidelines.
[2025] 2 S.C.R. 1547

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

List of Keywords
Arbitration; Joint and several liability; Stock market; Stock broker;
Debit balance; Oral contract; Judicial intervention; Section 34;
Section 37; Arbitration and Conciliation Act; SEBI; BSE; Patent
illegality; Perversity; Marital relationship; Wife; Husband; Spouse;
Section 16; Public policy.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2227 of 2025
From the Judgment and Order dated 29.04.2021 of the High Court
of Judicature at Bombay in AN No. 126 of 2006

Appearances for Parties
Dhruv Mehta, Sr. Adv., Dharav Shah, Dhawal Desai, Ms. Nishi
Sangtani, Pranaya Goyal, Advs. for the Appellant.
Mayilsamy K, G Ananda Selvam, Dr. Gayathiri A. S, Arun Pandiyan
S, V. Pavel, Nihangam R Maurya, P. Soma Sundaram, Kabilan
Manoharan, K Vijay Anand, Advs. for the Respondents.

Judgment / Order of the Supreme Court

Judgment

Pamidighantam Sri Narasimha, J.

1. Leave granted.
2. The issue arising in the present appeal is whether respondent no. 1,
who is the husband of respondent no. 2, could have been made a
party to the arbitration that was invoked by the appellant, who is a
registered stock broker, and held to be jointly and severally liable
for the debit balance that had accrued in the wife’s (respondent
no. 2’s) account with the appellant. The arbitral tribunal found that
both respondents were jointly and severally liable for repaying the
debit balance in respondent no. 2’s account, and the respondents’
applications under Section 34 of the Arbitration and Conciliation Act,
19961 to set aside the arbitral award were dismissed by the learned

1 Hereinafter “the Act”.
1548 [2025] 2 S.C.R.

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single judge of the High Court. However, the division bench of the
High Court allowed the Section 37 appeal preferred by respondent
no. 1 by order dated 29.04.2021 and set aside the arbitral award
only against him, which is impugned before us in the present appeal.
For the reasons detailed below, we have allowed the appeal and
set aside the impugned order based on the following conclusions:
First, by interpreting Bye-law 248(a) of the Bombay Stock Exchange2
Bye-laws, 1957 that provides for arbitration between members and
non-members of the BSE, and considering the nature of respondent
no. 1’s involvement qua transactions conducted in respondent no.
2’s account, we have held that an oral contract undertaking joint
and several liability falls within the scope of the arbitration clause
and the arbitral tribunal could exercise jurisdiction over respondent
no. 1. Second, considering the settled jurisprudence on the scope
of judicial intervention under Section 34 and Section 37 of the
Act, we have held that the arbitral tribunal arrived at a reasonable
conclusion, based on evidence, as to the joint and several nature
of the respondents’ liability. The arbitral award does not suffer from
perversity and patent illegality as has been held by the High Court
in the Section 37 appeal, and therefore, we have upheld the arbitral
award in its entirety.
3. Facts: The relevant facts are as follows. The appellant is a stock
broker and a registered member of the BSE. In 1999, the respondent
nos. 1 and 2, who are husband and wife respectively, approached
the appellant for opening trading accounts and to this end, they
executed individual Client Registration Applications on 01.08.1999.
As per the appellant, respondent no. 1 represented that the accounts
would be jointly operated by both of them and they would be jointly
and severally liable for any losses.
3.1 At the end of the settlement period on 31.01.2001, there was
an undisputed credit balance of Rs. 7,40,020/- in the account
of respondent no. 1, that was payable by the appellant. On
16.02.2001, respondent no. 1 further paid a sum of Rs. 2 lakhs
to the appellant, that increased his credit balance to Rs.
9,40,020/-.On the other hand, there was a debit balance of
Rs. 7,77,058/- in respondent no. 2’s account on 20.01.2001,

2 Hereinafter “BSE”.
[2025] 2 S.C.R. 1549

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

which further increased to Rs. 11,40,413/- by 17.02.2001. The
appellant’s case is that on oral instruction of respondent no. 1,
it transferred the credit balance of Rs. 9,40,020/- from the
husband’s account to the wife’s account on 05.03.2001 to
offset the losses.
3.2 However, due to a stock market crash in 2001, the debit balance
in respondent no. 2’s account bludgeoned to Rs. 1,18,48,069/- as
on 12.04.2001, which is the recoverable amount in arbitration.
3.3 The appellant initiated arbitration under BSE Bye-law 248(a)
and impleaded both the respondents, seeking an amount of
Rs. 1,27,36,670/- with 18% interest from both of them to recover
the losses in respondent no. 2’s account. The respondents
filed separate written statements. In respondent no. 1’s written
statement-cum-counter-claim, he alleged that the appellant’s
arbitration claim is not maintainable for misjoinder of parties
and causes of action as each client is a separate legal entity.
Further alleging that the appellant transferred the credit balance
from his account to his wife’s account without express authority
or written consent as is required by SEBI guidelines, he claimed
Rs. 10,66,922/- with 18% interest from the appellant to
recover the amount so adjusted. Respondent no. 2, in her
separate written statement alleged that the appellant undertook
unauthorised transactions from her account and also took the
position that respondent no. 1 is not jointly and severally liable.
4. Findings of the arbitral tribunal: The arbitral tribunal allowed the
appellant’s claim and held both respondents to be jointly and severally
liable to pay Rs. 1,18,48,069/- along with interest @ 9% p.a. from
01.05.2001 till the date of payment. It also dismissed the counter-
claim preferred by respondent no. 1. The reasons by the arbitral
tribunal, briefly stated, are:
4.1 The transactions undertaken by the appellant on behalf of
respondent no. 2 in her account were authorised and were
as per her instructions. This finding has not been contested
before us.
4.2 Respondent no. 1 is jointly and severally liable for the debit
balance in respondent no. 2’s account. For this, the arbitral
tribunal held that share transactions in a family are “normally
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and historically” undertaken by one person, albeit each individual
has a separate client code, contract notes, and bank accounts
as these are necessary documentation under tax laws.
4.3 Further, there was an oral agreement between respondent
no. 1 and the appellant. It held that respondent no. 1 was mostly
visiting the appellant’s office, and respondent no. 2 had given
instructions sometimes when respondent no. 1 was out of town
or under his instructions. The arbitral tribunal further relied on
the affidavit of Ms. Deepika Chokshi, who is a director of the
appellant company, and the affidavit of Mr. Parag Jhaveri, who
is a close associate of respondent no. 1 and whose father
introduced the respondents to the appellant.
4.4 The arbitral tribunal also reasoned that despite having a credit
balance of Rs. 7 lakhs in his account, respondent no. 1 paid
the appellant a further sum of Rs. 2 lakhs but never demanded
the same except at the time of filing the counter-claim.
4.5 Looking to the financial dealings of the respondents with the
appellant, it held that both respondents have accounts in all the
banks from which cheques were issued, although each of them
may have a separate account. On 15.09.1999, respondent no. 1
issued a cheque of Rs. 1,20,000/- from Syndicate Bank towards
the debit balance in his account. On 06.10.1999, a cheque of
the next serial number was issued from the same bank account
number to be paid into the account of respondent no. 2. Similarly,
on 28.09.1999, a single cheque of Rs. 10,86,188/- was issued
from Syndicate Bank with an instruction to the appellant to credit
Rs. 2,21,440/- to respondent no. 2’s account and the balance
to respondent no. 1’s account.
4.6 Relying on the above material, the arbitral tribunal held the
respondents to be jointly and severally liable and dismissed
respondent no. 1’s counter-claim as being a counter-blast and
being unsustainable as his credit balance was rightly adjusted
to the account of respondent no. 2. It also noted that while SEBI
Guidelines require written instructions to transfer money from
one constituent’s account to another’s, taking a practical view
and considering past experience and joint and several liability,
as well as the marital relationship of the respondents, it held that
the adjustment of balances between the accounts was in order.
[2025] 2 S.C.R. 1551

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

5. Section 34 petition: Both respondent nos. 1 and 2 filed separate
applications under Section 34 to set aside the arbitral award,
which were dismissed by the High Court single judge’s order
dated 23.08.2005. The Court held that there is an implied term in
the written contract and an oral agreement to the effect that both
husband and wife will be jointly and severally liable for the debit
balance in the wife’s account. Although the arbitration clause in
the agreement between the appellant and respondent no. 2 was
invoked, since such an arbitration clause also exists with respondent
no. 1, the Court held that there is no jurisdictional error in the
award. Further, that the finding of an oral understanding among
the parties was based on appreciation of the evidence on record
by the arbitral tribunal whose members are appointed by a trade
body. Hence, the learned single judge of the High Court did not
interfere with the award.
6. Impugned order allowing the Section 37 appeal: Respondent no. 1
moved a Section 37 appeal against the single judge’s order, which
was allowed by the impugned order that set aside the arbitral award
only qua respondent no. 1’s liability. It is necessary to appreciate
the reasoning of the High Court exercising appellate jurisdiction
under Section 37 in setting aside the arbitral award and reversing
the findings of the single judge. After formulating several issues, the
High Court proceeded on two broad reasons:
6.1 First, that the arbitral tribunal lacked jurisdiction against
respondent no. 1 and he could not have been made a party
to the arbitration. The High Court held that there are separate
causes of action against husband and wife – the cause of
action against respondent no. 2 (wife) was regarding the debit
balance in her account in respect of transactions on the floor
of the BSE. However, the cause of action against respondent
no. 1 (husband) was based on the alleged oral understanding
with the appellant regarding his liability to pay the dues in case
of default by respondent no. 2, which the High Court held is a
private and separate transaction that is not subject to Bye-law
248(a) as it is not conducted on the floor of the stock exchange.
Further, since there is no tripartite agreement between all three
parties, nor did the appellant invoke the arbitration agreement
with respondent no. 1, it could not have clubbed separate causes
of action in a common arbitration. Since respondent no. 1 does
1552 [2025] 2 S.C.R.

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not fall under Bye-law 248(a) in his capacity as a guarantor or
third party, the entire arbitration against him is without jurisdiction.
Even if this jurisdictional objection had not been raised before
the arbitral tribunal in accordance with Section 16 of the Act, the
Court held that the arbitral tribunal inherently lacked jurisdiction
to adjudicate on a private transaction between the appellant
and respondent no. 1. Further, since the arbitration clause is
statutory in nature, such jurisdiction cannot be conferred by
consent of the parties, and hence, not raising the objection
under Section 16 does not amount to a waiver under Section
4 of the Act.
6.2 Second, the findings of the arbitral tribunal are perverse and
patently illegal. With regard to joint and several liability of the
respondents, it held that the findings of the arbitral tribunal are
perverse as the respondents are two separate legal entities,
having separate and distinct accounts, separate client codes,
separate contracts notes and bills, and separate bank accounts.
The appellant only led oral evidence to prove joint and several
liability, however such oral evidence cannot be contrary to the
documents between the parties. The arbitral tribunal ignored BSE
Bye-laws, Rules and Regulations and SEBI guidelines by relying
on past experience and the respondents’ marital relationship to
hold them jointly and severally liable. Further, with regard to the
transfer of the credit balance from respondent no. 1’s account
to offset the debit balance in respondent no. 2’s account, it held
that there was no express or oral understanding that permitted
the same. Despite noting the need for express authorisation
of the client for such adjustment, the arbitral tribunal held it
to be valid. This is in violation of Bye-law 247A and the SEBI
guidelines, making such finding patently illegal and perverse.
6.3 While setting aside respondent no. 1’s liability under the arbitral
award, the High Court however held that his counterclaim
before the same arbitral tribunal was without jurisdiction as he
was not correctly impleaded. Rather, respondent no. 1 should
have invoked the arbitration clause against the appellant in a
separate proceeding to recover the amount.
7. Submissions: We have heard Mr. Dhruv Mehta, learned senior
counsel for the appellant, and Mr. Mayilsamy K, learned counsel
[2025] 2 S.C.R. 1553

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

for the respondents. The submissions made by Mr. Mehta are to
the effect that:
7.1 As per Section 7(4)(c) of the Act, an arbitration agreement is
deemed to exist when an averment raised to this effect is not
disputed or denied. Here, respondent no. 1 did not dispute the
existence of an arbitration agreement in his written statement,
and even filed a counter-claim and participated in the arbitral
proceedings. Further, a plea of lack of jurisdiction was neither
raised before the arbitral tribunal nor in the Section 34 petition;
it was only raised at the stage of the Section 37 appeal. He
submitted that the same is impermissible and relied on several
judgments of this Court.3 Such a jurisdictional plea is governed
by Section 16(2) of the Act and must be raised at the time of
submission of statement of defence.4
7.2 Further, the respondents constitute a ‘single entity’ for the
purpose of trading, which is demonstrated from the transactions
executed by them. In any event, relying on ONGC v. Discovery
Enterprise Pvt Ltd 5 and P.R. Shah Share & Stock Brokers
Pvt Ltd v. B.H.H. Securities Pvt Ltd 6, he submitted that a
non-signatory can be impleaded as party to the arbitration if
there is a composite transaction. The liability to clear the debit
balance in respondent no. 2’s account, being joint and several,
would enable the appellant to invoke a common arbitration
against both spouses as this is a composite transaction.
7.3 Bye-law 248(a) is widely worded and covers matters that are
incidental to transactions conducted on the floor of the stock
exchange, including any oral guarantee by respondent no. 1 to
pay the dues owed by respondent no. 2 to the appellant. This
oral guarantee is incidental to the transactions executed on the
floor of the stock exchange on behalf of respondent no. 2, and
gives rise to a single cause of action against both respondents
that is covered by the arbitration clause.

3 State of West Bengal v. Sarkar and Sarkar, (2018) 12 SCC 736; MTNL v. Canara Bank, (2020) 12 SCC
767; Union of India v. Pam Development (P) Ltd, (2014) 11 SCC 366.
4 Relied on GAIL v. Keti Construction Ltd, (2007) 5 SCC 38.
5 (2022) 8 SCC 42.
6 (2012) 1 SCC 594.
1554 [2025] 2 S.C.R.

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7.4 The High Court erred in reappreciating evidence in the Section
37 appeal to hold that there is no joint and several liability.
Further, it failed to appreciate that the scope in the Section 37
appeal is narrower than under Section 34, and the pleas taken
at the appellate stage cannot exceed the grounds in the Section
34 petition. Hence, the jurisdictional issue could not have been
agitated for the first time in the Section 37 appeal.
8. Mr. Mayilsamy K, learned counsel for the respondents, has submitted
that:
8.1 The jurisdictional issue was validly raised before the High Court.
In fact, such plea was also raised in the written statement
before the arbitral tribunal where respondent no. 1 claimed that
there was misjoinder of parties and that both respondents are
separate legal entities. In any case, since the arbitral tribunal
lacked ‘inherent jurisdiction’, the same can be raised at any
stage and the time-limit under Section 16(2) does not apply.7
8.2 That both respondents are separate and individual entities, as
evidenced by their separate client agreements and independent
client codes. Further, Bye-law 247A of the BSE Bye-laws read
with SEBI Guidelines dated 18.11.1993 prohibits a stock broker
from making payments from one client’s account to the other.
In this light, a common arbitration could not have been invoked
against both respondents. In fact, the appellant only invoked
and filed a reference against respondent no. 2.
8.3 The Member-Client Agreement, as approved by SEBI, does
not provide for an indemnity/guarantee clause, and each client
is solely liable to the stock broker for their dues. Hence, the
arbitral tribunal could not have assumed the respondents to be
a single entity and could not have held them to be jointly and
severally liable based on their marital status.
8.4 Bye-law 248(a), that provides for arbitration, does not cover
the dispute against respondent no. 1 as it only covers matters
incidental to transactions conducted on the floor of the exchange.
However, the cause of action against respondent no. 1 pertains

7 Relied on Chief General Manager (IPC), M.P. Power Trading Co. Ltd. v. Narmada Equipments (P) Ltd,
(2021) 14 SCC 548.
[2025] 2 S.C.R. 1555

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

to satisfaction of a debt owed by respondent no. 2, which is
a private transaction that was not entered into on the floor of
the exchange, and hence stands excluded from the arbitration
clause.
9. Issues: From the reasoning and findings of the arbitral tribunal, as
well as the manner in which the impugned order has proceeded to
set aside the arbitral award against respondent no. 1, we find that
there are two issues for us to consider in the present appeal:
(i) The first is a jurisdictional issue that pertains to the maintainability
of arbitration against respondent no. 1 under Bye-law 248(a)
for payment of the debit balance in respondent no. 2’s account
on the basis of his joint and several liability?
(ii) The second issue pertains to whether the High Court correctly
exercised jurisdiction under Section 37 while setting aside
the arbitral award against respondent no. 1 on the grounds of
perversity and patent illegality by finding that there is no joint
and several liability?
10. Jurisdiction of the arbitral tribunal: The arbitration reference by the
appellant has been made under Bye-law 248(a) of the BSE Bye-laws,
1957, which has been reproduced for ready reference:
“Arbitration other than between members
Reference to Arbitration
248. (a) All claims (whether admitted or not) difference
and disputes between a member and a non-member or
non-members (the terms ‘non-member’ and ‘nonmembers’
shall include a remisier, authorised clerk, a sub-broker who
is registered with SEBI as affiliated with that member or
employee or any other person with whom the member
shares brokerage) arising out of or in relation to dealings,
transactions and contracts made subject to the Rules, Bye-
laws and Regulations of the Exchange or with reference
to anything incidental thereto or in pursuance thereof or
relating to their construction, fulfillment or validity or in
relation to the rights, obligations and liabilities of remisiers,
authorised clerks, sub-brokers, constituents, employees
or any other persons with whom the member shares
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brokerage in relation to such dealings, transactions and
contracts shall be referred to and decided by arbitration
as provided in the Rules, Bye-laws and Regulations of
the Exchange.”
(emphasis supplied)

11. Based on the decisions of this Court in Bombay Stock Exchange v.
Jaya I. Shah8 and P.R. Shah, Shares and Stock Brokers (supra)9, an
arbitration reference under Bye-law 248(a) is statutory in nature, as
opposed to being based on an arbitration agreement between the
parties in terms of Section 7 of the Act. The scope and interpretation of
Bye-law 248(a) falls for our consideration to determine the first issue.
12. Bye-law 248(a) specifically deals with disputes, claims, and differences
between “members”, i.e. stock brokers and “non-member(s)”, i.e.
client(s). It is undisputed that both respondents are non-members or
clients, but they entered into individual and separate client registration
agreements, leading to separate client codes and accounts in each of
their names. However, the appellant has invoked arbitration against
both of them for the debit balance in respondent no. 2’s account
based on an oral contract among the parties that both husband and
wife will be jointly and severally liable for the transactions in each
of their accounts.
13. While the existence of such an oral contract is a finding of fact that
must be based on evidence, at this stage, the simple question is,
presuming such an oral contract exists, whether the arbitral tribunal
can exercise jurisdiction over respondent no. 1 on its basis. Through
such an oral understanding, the respondents consented to treat
their independent client agreements with the appellant as joint
and composite. They have effectively entered into the transactions
undertaken in each of their trading accounts together, i.e., the
performance of the transactions in respondent no. 2’s trading
account is not only on her behalf but also on behalf of respondent
no. 1. Therefore, respondent no. 1 is effectively a party to the client
agreement between the appellant and respondent no. 2.

8 (2004) 1 SCC 160, para 36.
9 P.R. Shah, Shares and Stock Brokers Private Limited v. B.H.H. Securities Private Limited (supra), para 13.
[2025] 2 S.C.R. 1557

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

14. In this light, the High Court’s reasoning in the impugned order that
arbitration was only invoked against respondent no. 2 as only her
client code and client agreement were referenced by the appellant is
a hyper-technical approach as the claim had been filed against both
respondents. While interpreting contracts, courts must acknowledge
the practicalities of how parties execute and participate in transactions
and how they understand and perform mutual obligations under the
contract.10 To facilitate ease of contract and to prevent respondent no. 1
from mischievously wriggling out of his liability for the transactions,
it is necessary to take into account the reality of the situation. The
appellant conducted the transactions in each their accounts based
on an oral agreement among all the parties that the respondents
will jointly operate and manage both accounts and undertake liability
for the same. Therefore, in these facts, even respondent no. 1 is
a “non-member” or client under Bye-law 248(a) with respect to the
account in respondent no. 2’s name.
15. In ONGC v. Discovery Enterprise, this Court comprehensively laid
down the factors to determine when a non-signatory can be made
party to an arbitration,11 which has been subsequently affirmed
by a Constitution Bench in Cox and Kings (supra)12. They are:
(a) the mutual intention of the parties, as is evidenced by their
conduct and participation in the formation and performance of the
underlying contract; (b) the relationship between the signatory and
non-signatory; (c) commonality of subject-matter; and (d) composite
nature of transaction.13 This test has been evolved in the context of
determining when a non-signatory can be made party to an arbitration
agreement. In the present matter, although arbitration is not based
on consent of the parties but is under the statutory Bye-laws of BSE,
application of this test only strengthens our conclusion. The oral
contract of joint and several liability reflects the mutual intention of
the parties that the respondents will enter into and perform trading
transactions together, even if they are conducted only from one
of their accounts, leading to a composite transaction. The marital
relationship of the respondents and them approaching the appellant

10 See Cox and Kings v. SAP India Pvt Ltd, (2024) 4 SCC 1, paras 97, 132, 133 (Chandrachud, J).
11 ONGC Ltd v. Discovery Enterprises Pvt Ltd (supra), para 40.
12 Cox and Kings v. SAP India Pvt Ltd (supra), paras 132-133, 170.8 (Chandrachud, J) and para 223.5, 229
(Narasimha, J).
13 ibid, paras 132, 229.
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together as well as opening accounts at the same time, through the
same referee as is seen from their client registration forms, further
strengthens this conclusion.
16. At this juncture, it would also be relevant to note this Court’s decision
in P.R. Shah v. B.H.H. Securities (supra), that arose in somewhat
similar facts. There, the first respondent referred a dispute against
the appellant and the second respondent for arbitration under the
BSE Bye-laws. The appellant, which was also a stock broker, was
a sister company of the second respondent. The first respondent
executed certain trades in the account of the second respondent, but
claimed that even the appellant was jointly and severally liable to pay
the amounts due. It invoked arbitration against both of them and the
arbitral tribunal therein held both of them to be liable. This Court held
that while arbitration between a broker and client is under Bye-law
248(a) and arbitration between two brokers is governed by Bye-law
282 of the BSE14, a common reference to arbitration is maintainable as
it is in regard to the same claim and there is an arbitration agreement
between the first respondent and the second respondent, as well
as between the first respondent and the appellant.15 Here as well,
the broker who was the first respondent entered into transactions
with the second respondent on an understanding that the appellant
will also be liable.16
17. While the primary issue in P.R. Shah (supra) was a composite
reference to arbitration despite the existence of different arbitration
mechanisms under Bye-laws 248(a) and 282, it is clear that this
Court also upheld the invocation of arbitration under BSE Bye-laws
against a person other than the client from whose account the
transactions were undertaken by relying on an understanding of
joint and several liability.

14 Bye-law 282 of the BSE Bye-laws, 1957 reads:
“282. All claims, complaints, differences and disputes between members arising out of or
in relation to any bargains, dealings, transactions or contracts made subject to the Rules,
Bye-laws and Regulations of the Exchange or with reference to anything incidental thereto
(including claims, complaints, differences and disputes relating to errors or alleged errors
in inputting any data or command in the Exchange’s computerised trading system or in
execution of any trades on or by such trading system) or anything to be done in pursuance
thereof and any question or dispute whether such bargains, dealings, transactions or
contracts have been entered into or not shall be subject to arbitration and referred to the
Arbitration Committee as provided in these Bye-laws and Regulations.”
15 P.R. Shah, Shares and Stock Brokers (supra), para 19.
16 ibid, para 18.
[2025] 2 S.C.R. 1559

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

18. The High Court in the impugned order differentiated the decision in
P.R. Shah (supra) on the ground that the first respondent therein
invoked arbitration against both parties, but this was not the case
here. However, as held hereinabove, this conclusion is incorrect
and the appellant in this case did in fact invoke arbitration against
both respondents.
19. The other reason offered by the High Court to differentiate P.R. Shah
(supra) and to also hold that the cause of action against respondent
no. 1 does not fall within the scope of Bye-law 248(a) is that his oral
contract with the appellant is a separate and “private” transaction that
was not conducted on the floor of the stock exchange. We are of the
opinion that this conclusion is incorrect. In another decision of the
Bombay High Court in Syntrex Corporation v. Rajkumar Keshardev17,
it was held that disputes in respect of transactions that were not
conducted on the floor of the BSE, using its trading system, would
not be covered by Bye-law 248(a). However, there is no contention by
the respondents that the transactions in respondent no. 2’s account
were not conducted on the floor of the stock exchange. In this light,
and considering the broad wording of the Bye-law 248(a) to refer
disputes arising out of, in relation to, incidental to or in pursuance
of transactions, contracts, and dealings to arbitration,18 the oral
contract between the appellant and respondents cannot be termed
as a “private” transaction. The liability to pay the appellant directly
arises out of transactions conducted on the floor of the exchange and
the oral contract is squarely on who bears this liability. Therefore, it
falls within the ambit of Bye-law 248(a).
20. The High Court in the impugned order relied on this rationale of a
“private” transaction to hold that the arbitral tribunal lacked inherent
jurisdiction to decide the claim against respondent no. 1, and such
a jurisdictional plea could be raised at any stage even if it was not
raised before the arbitral tribunal. From the above reasons, it is

17 2007 SCC OnLine Bom 620, paras 2 and 5.
18 See Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1, wherein para 151 held “…The third approach
is to avoid either broad or restrictive interpretation and instead the intention of the parties as to scope of
the clause is understood by considering the strict language and circumstance of the case in hand. Terms
like ‘all’, ‘any’, ‘in respect of’, ‘arising out of’ etc. can expand the scope and ambit of the arbitration clause.
Connected and incidental matters, unless the arbitration clause suggests to the contrary, would normally
be covered.”
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clear that there is no inherent lack of jurisdiction.19 Consequently,
any issue regarding the scope of Bye-law 248(a) ought to have been
raised in accordance with Section 16 of the Act20, i.e. during the
arbitration, not later than the submission of statement of defence.21
Neither respondent has, in their statements of defence or Section
34 petitions, raised an objection to the arbitral tribunal’s jurisdiction
in clear terms beyond stating that there is a misjoinder of parties as
they are not jointly and severally liable. A clear jurisdictional issue
was only raised at the Section 37 appeal stage, as has also been
noted by the High Court in the impugned order.
21. This Court has held, in several judgments, that when the jurisdictional
issue has not been raised in accordance with Section 16, it is
deemed that the objecting party has waived his right, in terms

19 See Hindustan Zinc Limited v. Ajmer Vidyut Vitran Nigam Limited, (2019) 17 SCC 82, paras 17-19; M.P.
Power Trading Co. Ltd. v. Narmada Equipments Pvt. Ltd. (supra), para 14. In these decisions, this Court
has held that a plea of inherent lack of jurisdiction, i.e., when there is a lack of subject-matter jurisdiction,
renders a decree nullity and cannot be cured by the consent of the parties. Therefore, this plea can be
raised at any stage even if it was not raised before the arbitral tribunal.
20 Section 16 of the Act reads:
“16. Competence of arbitral tribunal to rule on its jurisdiction.—(1) The arbitral tribunal
may rule on its own jurisdiction, including ruling on any objections with respect to the
existence or validity of the arbitration agreement, and for that purpose,—
(a) an arbitration clause which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure
the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than
the submission of the statement of defence; however, a party shall not be precluded from
raising such a plea merely because that he has appointed, or participated in the appointment
of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as
soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral
proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-
section (3), admit a later plea if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3)
and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral
proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting aside
such an arbitral award in accordance with section 34.”
21 McDermott International Inc v. Burn Standard Co. Ltd, (2006) 11 SCC 181, para 51; Gas Authority of
India Ltd v. Keti Construction (I) Ltd (supra), paras 24 and 25; M/s Vidyawati Construction Company v.
Union of India, 2025 INSC 101, paras 13-15.
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AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

of Section 4 of the Act 22 to raise the same at a later stage. 23
Such objection cannot be raised for the first time when the party
is challenging the award under Section 34.24 Here, respondent
no. 1 not only filed his statement of defence and participated in the
arbitral proceedings but also filed a counter-claim, thereby submitting
to the arbitral tribunal’s jurisdiction.25 Hence, any jurisdictional
objection must be rejected on this ground as well.
22. Whether the arbitral award ought to have been set aside: The
limited supervisory role of courts while reviewing an arbitral award
is stipulated in Section 34 of the Act, beyond whose grounds courts
cannot intervene and cannot correct errors in the arbitral award.26
The appellate jurisdiction under Section 37 is also limited, as it is
constrained by the grounds specified in Section 34 and the court
cannot undertake an independent assessment of the merits of the
award by reappreciating evidence or interfering with a reasonable
interpretation of contractual terms by the arbitral tribunal.27 The court
under Section 37 must only determine whether the Section 34 court
has exercised its jurisdiction properly and rightly, without exceeding
its scope.28
23. Since the Section 34 petition in this case was filed prior to the 2015
Amendment to the Act, the pre-amendment statutory position must
be considered,29 the relevant portion of which reads as follows:

22 Section 4 of the Act reads:
“4. Waiver of right to object.—A party who knows that—
(a) any provision of this Part from which the parties may derogate, or
(b) any requirement under the arbitration agreement, has not been complied with and yet
proceeds with the arbitration without stating his objection to such non-compliance without
undue delay or, if a time limit is provided for stating that objection, within that period of time,
shall be deemed to have waived his right to so object.”
23 Union of India v. Pam Development (P) Ltd (supra), para 17.
24 ibid, para 18; Gas Authority of India Ltd (supra), para 25; MSP Infrastructure Limited v. Madhya Pradesh
Road Development Corporation Limited, (2015) 13 SCC 713, paras 13-16; MP Rural Road Development
Authority v. L.G. Chaudhary Engineers and Contractors, (2018) 10 SCC 826, para 19, as clarified in
Sweta Construction v. Chhattisgarh State Power Generation Company Ltd., (2024) 4 SCC 722, paras
13-17.
25 See Govind Rubber Ltd v. Louis Dreyfus Commodities Asia Pvt Ltd, (2015) 13 SCC 477, para 21; State
of West Bengal v. Sarkar and Sarkar (supra), para 11.
26 McDermott International Inc (supra), para 52.
27 MMTC Ltd v. Vedanta Ltd, (2019) 4 SCC 163, para 14; Konkan Railway Corporation Ltd v. Chenab
Bridge Project Undertaking, (2023) 9 SCC 85, para 25.
28 MMTC Ltd (supra), 14; Bombay Slum Redevelopment Corporation Pvt Ltd v. Samir Narain Bhojwani,
(2024) 7 SCC 218, para 26.
29 Batliboi Environmental Engineers Ltd v. Hindustan Petroleum Corporation Ltd, (2024) 2 SCC 375, para 31.
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“34. Application for setting aside arbitral award.—(1)
Recourse to a court against an arbitral award may be
made only by an application for setting aside such award
in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the court only if—
***
(b) the court finds that—
(i) the subject-matter of the dispute is not capable of
settlement by arbitration under the law for the time being
in force, or
(ii) the arbitral award is in conflict with the public policy
of India.
Explanation.—Without prejudice to the generality of sub-
clause (ii), it is hereby declared, for the avoidance of any
doubt, that an award is in conflict with the public policy of
India if the making of the award was induced or affected
by fraud or corruption or was in violation of Section 75
or Section 81.”
(emphasis supplied)

24. The term “public policy” in Section 34(2)(b)(ii) has been interpreted
by this Court as meaning (a) the fundamental policy of Indian law,
or (b) the interest of India, or (c) justice or morality.30 In ONGC v.
Saw Pipes,31 this Court further held that an arbitral award can be
set aside as being contrary to public policy if it is patently illegal.
The illegality must go to the root of the matter and must be so unfair
and unreasonable that it shocks the court’s conscience; it cannot be
of a trivial nature.32 Such patent illegality includes a situation where
the award is in contravention with substantive law.33
24.1 Further, an award can be set aside as being opposed to the
“fundamental policy of India” if it is perverse,34 i.e., the finding is

30 Renusagar Power Co Ltd v. General Electric Co, 1994 Supp (1) SCC 644, para 66.
31 ONGC v. Saw Pipes Ltd, (2003) 5 SCC 705.
32 ibid, para 31; McDermott International Inc (supra), para 59.
33 ONGC v. Saw Pipes (supra), para 54; Associate Builders v. DDA, (2015) 3 SCC 49, para 42.1.
34 ONGC v. Western Geco Internation Ltd, (2014) 9 SCC 263, para 39.
[2025] 2 S.C.R. 1563

AC Chokshi Share Broker Private Limited v.
Jatin Pratap Desai & Anr.

not based on evidence, or the arbitral tribunal takes something
irrelevant into account, or ignores vital evidence.35 However,
an award is not perverse if the finding of fact is a possible
view that is based on some reliable evidence.36
25. The High Court, while exercising jurisdiction under Section 37, has
set aside the arbitral award against respondent no. 1 on the grounds
of patent illegality and perversity in the following manner: first, that
the arbitral award is contrary to Bye-law 247A of the BSE Bye-laws,
1957 and the SEBI Guidelines that mandate express authorisation
of the client for adjustment of accounts, and second, that the finding
of joint and several liability is based on the respondents’ marital
relationship and past experience, contrary to their distinct legal entities
and separate accounts, thereby making it perverse.
26. We will first deal with the issue of perversity of the finding of joint
and several liability. We have already stated the material relied on
by the arbitral tribunal and its reasons to arrive at such finding.
Broadly, the arbitral tribunal considered the oral evidence of Ms.
Deepika Chokshi and Mr. Parag Vinod Jhaveri, both of whom
have stated in their affidavits that the respondents agreed to be
jointly and severally liable and that their account balances would
be netted off. These witnesses were also cross-examined but
the respondents could not bring out anything to the contrary. The
arbitral tribunal also considered the fact that respondent no. 1
would visit the appellant’s office and manage both accounts, as
well as the manner of financial dealings vis-à-vis both accounts.
Based on this material on the conduct of the parties as well as the
oral representations made by the respondents to the appellant, the
arbitral tribunal arrived at the finding that there was an oral contract
of joint and several liability. This is a pure finding of fact, arrived
at by the arbitral tribunal, on the basis of oral and documentary
evidence adduced by the parties.
27. Applying the test for perversity under Section 34 as explained above,
it is clear that the High Court, while exercising jurisdiction under
Section 37, adopted an incorrect approach. The arbitral tribunal’s

35 Associate Builders (supra), para 31.
36 Kuldeep Singh v. Commr of Police, (1999) 2 SCC 10, para 10, as cited in Associate Builders (supra),
paras 32, 33.
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findings are definitely based on evidence, as has been rightly held by
the Section 34 court. The High Court, at the stage of the Section 37
appeal, took an alternative view on this finding of fact by reappreciating
evidence. The arbitral tribunal’s conclusion was based on oral and
documentary evidence regarding the conduct of the parties, which
leads to a reasonable and possible view that there is joint and
several liability. Hence, the High Court, while exercising jurisdiction
under Section 37, has incorrectly held the award to be perverse.37
28. Coming to the issue of patent illegality, the High Court held that despite
noting the need for a client’s express authorisation for adjustment
of accounts, the arbitral tribunal approved an illegal transfer of the
credit balance from respondent no. 1’s account to that of respondent
no. 2. On going through the arbitral award, the finding of the arbitral
tribunal is based on “past experience” – meaning the conduct of
respondent no. 1 all along acting on behalf of respondent no. 2,
joint and several liability, and the respondents’ marital relationship.
29. Bye-law 247A was inserted by way of an amendment to incorporate
the SEBI Guidelines on Regulation of Transactions Between Clients
and Brokers dated 18.11.1993. It reads:
“247A. Notwithstanding anything to the contrary contained
in these Bye-laws, the following shall regulate the
transactions between Clients and Brokers:
“(1) It shall be compulsory for all Member brokers to
keep the money of the clients in a separate account and
their own money in a separate account. No payment for
transactions in which the Member broker is taking a position
as a principal will be allowed to be made from the client’s
account. The above principles and the circumstances under
which transfer from client’s account to Member broker’s
account would be allowed are enumerated below.

37 See P.R. Shah, Shares & Stock Brokers (supra), para 21; Dyna Technologies Pvt Ltd v. Crompton
Greaves Ltd, (2019) 20 SCC 1, paras 24-25; Anglo American Metallurgical Coal Pty Limited v. MMTC
Limited, (2021) 3 SCC 308, para 48; UHL Power Company Ltd. v. State of Himachal Pradesh, (2022) 4
SCC 116, para 22.
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Jatin Pratap Desai & Anr.

A) Member Every member broker shall keep
Broker such books of accounts, as will be
to keep necessary, to show and distinguish
Accounts in connection with his business as a
member-
(i) Moneys received from or on account
of and moneys paid to or on account
of each of his clients and,
(ii) the moneys received and the moneys
paid on Member’s own account.
B) Obligation Every member broker who holds or
to pay receives money on account of a client
money shall forthwith pay such money to
into-“client current or deposit account at bank to
account” be kept in the name of the member
in the title of which the word “clients”
shall appear (hereinafter referred to
as “clients account”. Member broker
may keep one consolidated clients
accounts for all the clients or accounts
in the name of each client, as he
thinks fit:
Provided that when a Member broker
receives a cheque or draft representing
in part money belonging to the client
and in part money due to the Member,
he shall pay the whole of such cheque
or draft into the clients account and
effect subsequent transfer as laid
down in para D(ii).
C) What No money shall be paid into clients
moneys account other than-
to be paid
i) money held or received on account
into “clients
of clients
account”
ii) such money belonging to the member
as may be necessary for the purpose
of opening or maintaining the account;
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iii) money for replacement of any sum
which may by mistake or accident
have been drawn from the account in
contravention of para D given below
iv) a cheque or draft received by the
Member representing in part money
belonging to the client and in part
money due to the member.
D) What No money shall be drawn from clients
moneys account other than-
to be i) money properly required for payment
withdrawn to or on behalf of clients or for or
from towards payment of a debt due to
“clients the member from clients or money
account” drawn on client’s authority, or money
in respect of which there is a liability
of clients to the Member, provided that
money so drawn shall not in any case
exceed the total of the money so held
for the time being for such each client;

ii) such money belonging to the Member
as may have been paid into the client
account under para 1C(ii) or 1(C)(iv)
given

iii) money which may by mistake or
accident have been paid into such
account in contravention of para C
above.
E) Right to Nothing in this para 1 shall deprive
lien, set-off a Member broker of any recourse of
etc., not right, whether by way of lien, set-off,
affected. counter-claim charge or otherwise
against moneys standing to the credit
of clients account.

It shall also be compulsory for all Member brokers/
Sub-brokers to receive or to make all payments from or
to the clients strictly by way of account payee crossed
cheques or demand drafts or direct credit into the bank
account through EFT or any other modes as so permitted
[2025] 2 S.C.R. 1567

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Jatin Pratap Desai & Anr.

by the Reserve Bank of India. Member brokers shall accept
cheques drawn only by clients and issue cheques only in
favour of the clients. However, in exceptional circumstances
Member broker may receive payment in cash, to the extent
that there is no violation of the Income Tax requirement
for the time being in force.”
30. Bye-law 247A provides that a broker shall not withdraw money from
a client’s account other than money required for payment on behalf
of the client, for payment of debt due to the broker from the client,
or money in respect of which there is a liability of the client to the
broker. Once the arbitral tribunal arrived at a finding that respondent
no. 1 is jointly and severally liable for the debit balance in respondent
no. 2’s account, which we have upheld above, Bye-law 247A in fact
permits the withdrawal of the credit balance from respondent no.
1’s account. Therefore, the adjustment of accounts on 05.03.2001
is legal and valid. Although the arbitral tribunal has held that written
authorisation for such adjustment is required, we find nothing in
Bye-law 247A or in the SEBI Guidelines, on which this Bye-law is
based, that mandates the same.
31. Bye-law 227(a) also supports the adjustment of accounts, although
it has not been considered in detail at the earlier stages. It provides
for the broker’s lien, which remains unaffected as per clause (E) of
Bye-law 247A, and reads:
“Whenever and so often as a constituent is indebted to a
member all securities and other assets from time to time
lodged with the members by such constituent or held by
the member for and on behalf of such constituent and any
cash lying to the credit of such constituent with the member
shall be subject to the lien of such member for any general
balance of account or margin or other monies that may be
due at any time by such constituent singly or jointly with
another or others to such member in respect of any business
done subject to the Rules, Bye-laws and Regulations of
the Exchange and shall be deemed a general security for
payment to such member of all such monies (including
interest, commission, brokerage and other expenses) as
may be due by such constituent in such manner.”
(emphasis supplied)
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As per Bye-law 227(a), the appellant had lien over the cash balance
lying in the account of respondent no. 1 on account of his joint liability
with respondent no. 2. Therefore, from this perspective as well, the
adjustment of accounts was in accordance with the BSE Bye-laws and
was not against the legal provisions governing the issue. Therefore,
the arbitral award does not suffer from patent illegality that warrants
interference with its findings.
32. In view of the above reasons, we answer the two issues that we set
out in the beginning in the following manner:
i. Under Bye-law 248(a), the arbitral tribunal could have exercised
jurisdiction over respondent no. 1 on the basis of an oral contract
that he would be jointly and severally liable for the transactions
undertaken in respondent no. 2’s account. Such oral contract
would not amount to a “private” transaction that falls outside
the scope of arbitration.
ii. The High Court did not correctly exercise jurisdiction under
Section 37 as it reappreciated evidence and examined the
merits of the award. Upon examination of the findings of the
arbitral tribunal, it is clear that the award is not liable to be set
aside on the grounds of perversity or patent illegality.
33. We therefore set aside the impugned order of the High Court in Appeal
No. 126/2006 in Arbitration Petition 309/2004 dated 29.04.2021 and
allow the present appeal. As a consequence, the arbitral award dated
26.02.2004 is upheld in its entirety and respondent no. 1 is jointly
and severally liable, along with respondent no. 2, to pay the appellant
the arbitral sum of Rs. 1,18,48,069/- along with 9% interest p.a.
from 01.05.2001 till date of repayment as has been directed by the
arbitral tribunal.
34. Pending applications, if any, stand disposed of.
35. No order as to costs.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Niti Richhariya, Hony. Associate Editor
(Verified by: Liz Mathew, Sr. Adv.)